OPINION ON THE POST-INCORPORATION DUTIES OF A REGISTERED COMPANY/BUSINESS NAME/INCORPORATED TRUSTEE

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OPINION ON THE POST-INCORPORATION DUTIES OF A REGISTERED COMPANY/BUSINESS NAME/INCORPORATED TRUSTEE

INTRODUCTION:

For a company to attain legal status, it must be incorporated. Incorporation refers to the registration of a company, business name or incorporated trustee with the statutory body legally empowered to do same. In Nigeria, this statutory body is the Corporate Affairs Commission (‘CAC’) created by statute (Companies and Allied Matters Act 1990). It should be noted that registration of a private entity may either be done personally by individuals or a group of people seeking to register their businesses or by those accredited with CAC, for instance, Lawyers.

MAIN CONTENT:

A company’s duties and obligations do not cease upon incorporation. To this effect, a company has the following post-incorporation duties:

  1. Filing of Annual Returns

This consists of a yearly statement that gives a view of the company’s performance for the year and its financial position. It is statutorily required that all duly registered businesses, companies, and incorporated trustees submit their annual returns yearly to the CAC. This allows the Commission keep records of the company/business and confirm it is still in operation and will not be dormant in the nearest future. The CAMA mandates all businesses, companies and incorporated trustees to submit their annual returns for filing within a prescribed period of time.

 

  • Business Name: Registered Partnerships, business ventures and all other types of registered business names need not submit annual returns for the first year after registration of the business. For subsequent years the business is in existence, annual returns must be submitted for filing and applicable fees paid not later than the 30th day of June of each year.

 

Failure of a registered business to file its annual returns attracts a penalty of N2,500 for each year not filed.

 

  • Companies: The first annual returns of an incorporated company must be submitted 18 months after the company’s incorporation and within 42 days after the first Annual General Meeting for the year. Subsequent annual returns must be filed yearly also within 42 days after the company’s AGM.

 

A duly filled annual returns form signed by a director and the company secretary should be forwarded to the Commission for filing with a copy of the company’s financial and audit report for the year and all applicable fees paid.

 

Failure to file annual returns currently attracts a penalty for each year not filed of N3,000 for small private companies with share capitals of less than N2 million, N5,000 for larger private companies with share capitals of more than N2 million, N10,000 for public companies and N5,000 for companies limited by guarantee.

 

  • Incorporated Trusteeships: Annual returns for incorporated trustees must be filed between 30th June and 31st December each year other than the year in which it is incorporated.

The names, addresses and occupations of the trustees and members of the governing body, particulars of any land held by the trusteeship during the year and any changes which have taken place in the constitution of the trusteeship during the preceding year are matters contained in these kinds of annual reports.

 

Failure to file annual returns attract a penalty of N5000 for each year not filed.

 

Default: CAC is empowered to strike off names from the Register of Companies where it reasonably believes that the Company/Business/Incorporated Trustee is no more in operation.

 

  1. Significant Changes in the Business

A company/legal entity continues to grow; hence, there may be significant changes in the company’s structure of which the Commission must be notified. Such changes may include:

  • Increase or decrease in the share capital of an incorporated company
  • Changes in the shareholding structure of the company
  • Change of the company or business registered address
  • Change of company officials such as the board of directors or company secretary of an incorporated company, change in proprietorship in a registered business name, change of trustees in incorporated trustees, etc
  • Change of name of the company, business or trusteeship
  • Notice of winding up of companies, cessation of business or dissolution of incorporated trustees, amongst others.

It is mandatory to file a notice of any of these and other changes with the CAC for record purposes and in compliance with the provisions of CAMA.

CONCLUSION/ACTIONS TO TAKE:

  • Hire a lawyer and get your post incorporation filings done, as soon as possible
  • Be a good patriot/citizen of Nigeria

Thank you!

By: Kitan Kola-Adefemi

For: Mind The_ Gap

        (Legal Team)

 

MAJOR RESEARCH SOURCES:

  • naijalegaltalkng.com
  • Companies and Allied Matters Act 1990, Cap C20, LFN 2004

5 Comments

  1. Olabisi says:

    This is a very insightful that different businesses especially Micro, small and medium . They are really ignorant of these facts.

  2. Arit Archibong says:

    Great! Thank you

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